Daily Morning Report 10/03/2016
New Zealand and Australian dollars slipped lower against their U.S. counterpart today after the Reserve Bank of New Zealand lowered interest rates unexpectedly and signaled the possibility for more cuts.
The kiwi weakened after the RBNZ lowered its benchmark interest rate to 2.25% from 2.50% at its monthly policy meeting. Analysts had expected the central bank to leave rates unchanged.
Commenting on the decision, RBNZ governor Graeme Wheeler said that China was one of the biggest risks to global growth.
The central bank also signaled the possibility for further rate cuts to come, depending on New Zealand’s economic data.
Meanwhile, investors remained cautious ahead of the European Central Bank’s highly anticipated policy decision due later in the day, amid expectations for additional easing measures to be announced.
Elsewhere, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.25% at 97.43.